Petco Health 2026 Q2 Earnings Strong Turnaround with 156.3% Net Income Surge

Petco Health (WOOF) delivered a strong earnings performance in Q2 2026, turning a net loss into a profit and raising its EBITDA guidance. The company’s strategic initiatives are showing measurable progress, as reflected in its improved operating income and free cash flow. With a renewed focus on retail fundamentals and customer engagement, Petco is positioning itself for sustainable, profitable growth.

Revenue

Total revenue declined slightly by 2.3% to $1.49 billion in the second quarter of 2026, compared to $1.52 billion in the same period the previous year. The Consumables segment accounted for the largest share, generating $729.92 million, followed by Supplies and companion animals with $495.69 million. Services and other revenue contributed $262.92 million, rounding out the company’s diversified revenue streams.

Earnings/Net Income

Petco Health returned to profitability with an EPS of $0.05 in Q2 2026, reversing a loss of $0.09 per share in the prior-year quarter—a 155.6% positive change. On the net income front, the company recorded $13.97 million, a dramatic turnaround from a net loss of $24.82 million in Q2 2025, representing a 156.3% positive swing. This strong performance signals a meaningful improvement in the company’s operating model and cost management.

Price Action

The stock price of Petco Health edged up 0.25% during the latest trading day, surged 15.32% during the most recent full trading week, and rose 30.39% month-to-date, reflecting renewed investor confidence following the earnings report.

Post-Earnings Price Action Review

The investment strategy of buying WOOF following earnings beats and selling after 30 days resulted in a negative return of 86.06%, significantly underperforming the benchmark return of 38.70%. Despite the poor performance, the strategy exhibited a Sharpe ratio of -0.57, suggesting risk-averse tendencies. Notably, it avoided any drawdowns, a feature that might appeal to more conservative investors.

CEO Commentary

CEO Joel D. Anderson highlighted the company’s progress in strengthening its operating model, noting a 40 million dollar increase in operating income and over 50 million in free cash flow for Q2. He emphasized the North Star project, which includes the reintroduction of the “Where the Pets Go” tagline and in-store events aimed at boosting customer engagement. Early results show higher Net Promoter Scores (NPS) and increased store traffic, driven by improved associate service. Anderson expressed optimism about setting the stage for sustained, profitable growth and outlined plans to reinvest in Q3 to advance Phase 3 of the strategy.

Guidance

Petco raised its 2025 adjusted EBITDA guidance to $385–$395 million, a 16% increase at the midpoint. Q3 adjusted EBITDA is expected to range between $92–$94 million, reflecting 15% year-over-year growth. However, full-year net sales are projected to decline by low single digits due to store closures. The company expects to end the year with $190 million in cash, $684 million in total liquidity, and CAPEX of $125–$130 million. Tariffs are expected to impact Q3 and Q4, with adjusted EBITDA likely down 2% year-over-year in Q4 due to tariff pressures and selective reinvestment.

Additional News

In early March 2025, Petco announced the appointment of three key executives to strengthen its leadership team: Sabrina Simmons as Chief Financial Officer, Michael Romanko as Chief Customer and Product Officer, and Jack Stout as Chief Merchandising Officer. These hires underscore the company’s commitment to strategic growth and operational excellence. Additionally, in February 2025, Petco announced inducement grants for newly hired executive leadership, including Mr. Romanko, under Nasdaq Listing Rule 5635(c)(4). The company also hosted a presentation at the Goldman Sachs Global Retailing Conference in September 2025 and scheduled several earnings calls throughout the year to keep investors informed.